August 14, 2009

In This Issue

CLIMATE AND ENERGY LEGISLATION: BOXER AND KERRY COMPLETING CAP-AND-TRADE PROVISIONS OVER BREAK, EMISSIONS ALLOWANCES LOOM LARGE

Congress will return from August recess on September 8, giving Senate committees with jurisdiction over the climate and energy bill three weeks to complete markups before the September 28 deadline set by Majority Leader Harry Reid (D-NV). Environment and Public Works (EPW) Chair Barbara Boxer (D-CA) plans to unveil her draft bill once Congress is back in session. Boxer’s bill, drafted in conjunction with Foreign Relations Chair John Kerry (D-MA), will take the lead on cap-and-trade provisions, setting greenhouse gas limits for the coming decades. It will also include language on the distribution of what could amount to hundreds of billions of dollars in emissions allowances—a matter that is also of substantial interest to Finance Chair Max Baucus (D-MT).

Baucus, a leading centrist Democrat, carries a great deal of influence on the Hill. In addition to chairing the Finance Committee, the six-term senator is EPW’s most senior Democrat, placing him in a unique position, and one that is further complicated by his prominent role in the healthcare debate. He has recently focused his energies on negotiate bipartisan compromises between members of his Finance Committee. If successful, he could have the momentum to win his committee substantial ground on emissions allowance legislation, using the argument that his committee is the best place to tackle the partisan divide. Indeed, the Finance Committee includes a number of swing votes including Senators Jay Rockerfeller (D-WV), Debbie Stabenow (D-MI), Olympia Snowe (R-MA), and Mike Crapo (R-ID).

It’s possible that both committees will draft separate versions of the bill, a scenario that Boxer says she is comfortable with. “I welcome all the committees to write whatever parts of the bills they feel they have jurisdiction over,” she said. “If he decides to write it, he should write it. And I’m happy to see all the committees get involved. And then Harry Reid is going to take all the bills and write his own bill.”

It’s also possible Baucus will be too busy with healthcare to meet Reid’s deadline—such was the case with his counterpart in the House, Ways and Means Chairman Charles Rangel (D-NY). Rangel, in spite of expressed plans to weigh in the climate bill, became occupied by healthcare and ultimately decided against a markup.

CLIMATE AND ENERGY LEGISLATION: STRUGGLING TREE FARMERS SEEK BAILOUT IN CLIMATE AND ENERGY BILL

Faced with falling timber prices and the economic downturn, tree farmers are turning to the climate and energy bill as a possible new source of revenue. Forest industry representatives have been actively engaging lawmakers recently, pushing action on two major items:

The definition of biomass: Forestry advocates would like to see forest biomass from private lands count towards the renewable electricity standard. House Agriculture Chair Collin Peterson (D-MN) negotiated to include this provision in his chamber’s version of the bill—Senate Agriculture Chairman Tom Harkin (D-IA) has said he plans to follow much of the Peterson language. But many opponents are concerned that Peterson’s amendments will remove important safeguards needed to protect sensitive areas during the nation’s push for bioenergy.

Opportunities for small foresters in carbon markets: The House bill does not provide incentives for small landowners to participate in carbon sequestration, although roughly a quarter of privately owned forest in the US belongs to landowners with fewer than 100 acres. To address this matter, Senator Jeanne Shaheen (D-NH) recently introduced legislation, backed by a number of prominent forestry and conservation groups, to offer supplemental incentives for small landowners who adopt practices—as advised by the Department of Agriculture—to increase their land’s carbon storage capacity.

Forestry advocates say these both inclusions are necessary to keep the industry—and privately owned forests—alive. With home construction almost stagnant, timber prices are half of what they were a decade ago. Forest landowners are in many cases finding that selling their land to developers makes more sense financially than keeping their business. Permitting these landowners to use their land for carbon sequestration or biomass production could help them earn a living while maintaining their forests.

RENEWABLE ENERGY: INTERIOR SEEKS TO EXPAND RENEWABLE ENERGY DEVELOPMENT ON PUBLIC LANDS

The Interior Department recently initiated efforts to fast-track solar energy projects on public lands, setting aside close to 700,000 acres in six Western states for solar study zones and expediting environmental analysis. The 24 study sites were identified as optimal for solar-power projects and effectively zoned for development, a move that will allow for the construction of 13 commercial-scale solar plants by the end of the year. Interior has a backlog of nearly 200 proposed solar projects. 

This push falls in line with the Interior’s broader goal of rapidly expanding domestic renewable energy development—according to agency officials, they plan to aggressively pursue any renewable projects that meet environmental standards. Solar zoning has been applauded by environmental and industry interests alike as a way of protecting wildlife habitat and wilderness areas. There is some concern, however, that some of the selected study zones could overlap with habitat for federally protected species.

Protected species have presented a problem for western energy development projects in the past. Most recently, Horizon Wind Energy announced that it would indefinitely suspend the construction of a 300-megawatt-capacity wind farm, which was to be located on critical habitat for the imperiled sage grouse. Many Senate Republicans support a focus on critical habitat, questioning whether wind and solar projects are the best use of land. Warning of “renewable energy sprawl,” they have been pushing for nuclear energy as more efficient source of domestic energy. Said Senator Lamar Alexander (R-TN) at a recent hearing, “We wouldn’t want to destroy the environment in an attempt to save it.”

Interior officials have likewise noted the challenges of wind power projects but are confident that on- and offshore sites will provide adequate space for the necessary turbines. Senate Environment and Public Works Chair Barbara Boxer (D-CA) plans to send a bipartisan request for Interior to determine the acreage available for potential new energy projects.

WATER: HOUSE COMMITTEE AT WORK OK SUSTAINABLE WATERSHED MANAGEMENT LEGISLATION

The House Transportation and Infrastructure Committee is currently working on the Sustainable Watershed Planning Act, a bill that would consolidate and coordinate water resource management efforts at all scales. Currently, water management activities and responsibilities are shared by agencies at all levels of government, often resulting in jurisdictional divides within watersheds. At the federal level, agencies frequently fail to coordinate efforts, and Congress has to approve projects on a case-by-case basis. Similarly, local projects developed under this system may not account for downstream or regional impacts.

Advocates of reform, such as ranking member John Boozman (R-AR), envision the federal government as a source of technical assistance and guidance for state and local water planning efforts.

“More and more often we are seeing growing cities’ needs for municipal and industrial water supplies at odds with similar needs for that same water downstream,” he said. “It conflicts with environmental, recreation, navigation or flood control needs elsewhere in the watershed. What has been missing in most cases is a comprehensive watershed plan against which more focused local feasibility plans can be measured.”

The bill was originally scheduled for committee markup in early June, but was pulled to allow time for incorporating more feedback. Committee staff is now working on a new draft, although they have yet to set a date for completion. The original draft included provisions to:

  • Create a sustainable watershed planning council, comprised of the administrator of the Environmental Protection Agency; the secretaries of Agriculture, Commerce, Energy, Transportation. Interior, Housing and Urban Development, and US Army; the chiefs of the Federal Emergency Management Agency and the Federal Energy Regulatory Commission; and state and tribal leaders.
  • Establish a president-appointed director to implement federal policies governing sustainable water resources management.
  • Create regional watershed planning boards, based on Army Corps of Engineers civil work districts, which would be responsible for developing five-year plans for water use and conservation. These plans would guide water resource decisions for the entire watershed, prioritizing increased water efficiency and quality, and improved ecosystem health and resilience. The boards would be comprised of federal, state, local, and non-government stakeholder representatives.
  • Provide eligible states with annual grants of up to $1.5 million for setting up water planning boards or supporting existing efforts.

Meanwhile, the Obama administration is revising decades-old rules for the Army Corps of Engineers, broadening their scope to include not only economic goals,  as is currently the case, but also environmental and social ones. The administration is also preparing an executive order that would strengthen federal restrictions on floodplain development. For more information on the order, see the July 31 edition of the ESA Policy News at: http://www.esa.org/pao/policyNews//pn2009/07312009.php

BUDGET: SENATE PASSES 2010 AG APPROPRIATIONS BILL—RURAL ENERGY PROGRAMS SEE STEEP INCREASE OVER HOUSE LEVELS

On August 4, the Senate voted 80-17 in favor of its 2010 agriculture appropriations bill, which includes boosts for both conservation and energy programs. The bill would provide $23.7 billion in discretionary funding for the Agriculture Department, the Food and Drug Administration, and other related agencies.

The Senate bill includes twice the money for rural energy programs as the House version, a difference that could factor prominently into conference negotiations. Noteworthy differences include:

The Rural Energy for America Program: The Obama administration’s budget request included spending boosts for renewable energy initiatives such as the Rural Energy for America Program (REAP). Following this request, the Senate bill provides REAP with $68 million in discretionary spending, which comes on top of the $60 million authorized for the program under the farm bill. The resulting $128 million would more than double the program’s 2009 spending levels. REAP, a loan guarantee and grant program, was launched in the 2002 farm bill in an effort to encourage farmers, ranchers, and small rural business owners to start energy development projects or improve energy efficiency on their property. The House bill does not change the program’s $60 million farm bill allotment, but provides only $20 million in discretionary authorizations—a 30 percent reduction from the Senate mark.

Biorefinery assistance: The farm bill provides $245 million to a program that provides loan guarantees and grants for biorefinery development, construction, and retrofitting. The Senate bill provides an additional $17 million in discretionary funds, whereas the House version includes no extra funding.

Conservation accounts, however, fared similarly in the House and Senate bills. Both chambers rejected the Obama administration’s proposed cuts for farm bill conservation programs, as well as the elimination of the Watershed and Flood Prevention Operations program.

UPCOMING LEGISLATION

Passed by the Senate:

  • “Cash for clunkers”: On August 6, the Senate voted 60-37 in favor of legislation to direct an additional $2 billion towards the “cash for clunkers” program, which provides consumers with rebates of up to $4500 for trading in older cars for new, more fuel efficient models. The largely party-line vote sought to keep the initiative, which has been credited with giving the auto industry its best sales month of the year, afloat at least through September. The vote came just after White House warnings that the “clunkers” program could run out of money within days. The bill is now headed to President Obama, a staunch supporter. Opponents of the bill argue that it is simply another form of bailout and is unreasonable given the current economic climate.

Passed by Committee:

  • Dead zone research (S952): On August 5, the Senate Commerce Committee unanimously passed a bipartisan bill to increase federal research on harmful algal blooms in oceans, coastal waters, and lakes. The legislation would reauthorize and boost existing research into toxic algal blooms and hypoxic “dead zones,” and it would direct federal officials to provide states and local governments with regional action plans for mitigating the effects of the blooms. Supporters of the Senate bill have identified Representative Brian Baird (D-WA) as a likely champion in the House. Earlier this year, the Energy and Environment Subcommittee chair called for additional funding to address ocean acidification and harmful algal blooms.
  • Geospatial mapping (S 1078): The Commerce committee also unanimously approved a bipartisan bill to create a comprehensive geospatial imagery mapping program at the US Geological Survey. The program would integrate data from agencies at all levels, reducing redundancies and serving as an information source for education, professional training, and applied research. A similar bill (HR 2489) is under subcommittee consideration in the House.

Just Introduced:

  • Algae-based biofuels (HR 3460): Bipartisan lawmakers in the House recently introduced a bill to include algae-based biofuels in the renewable fuel mandate and extend the cellulosic biofuel producer tax credit to algae-based biofuel producers. The mandate requires that 17 billion gallons of renewable fuels come from cellulosic biofuels and biodiesel by 2015, but does not include any language on algae. Proponents of the relatively new fuel source say that algae, unlike other renewable fuels, can produce oil from only sunlight, non-potable water, and carbon dioxide. In addition, algae-based biofuel production requires less space and results in fuel that is identical to traditional petroleum-based products, therefore requiring no major infrastructure upgrades. But industry representatives have been focusing on their product’s potential as a means of carbon sequestration—one figure indicates the production process could consume as much as 14 kilograms of carbon dioxide for every gallon of oil generated. But legislation like HR 3460 will be critical to getting the algae industry off the ground—even though studies indicate it will be able to produce fuel at a competitive price within two or three years, absent government support it will not likely be economically viable in the short-term. The bill has been referred to the House Ways and Means and Energy and Commerce committees, although neither has indicated when they plan to take the matter up. Meanwhile, the Senate may soon consider similar legislation this fall, possibly from Energy and Natural Resources Chair Jeff Bingaman (D-NM). Bingaman has named algae as a potentially important new source of fuel, while calling the renewable fuel standard language in the Senate’s climate and energy bill overly restrictive. He has expressed plans to introduce amendments to the bill in an effort to prevent it from freezing out emerging technologies.

Postponed:

The Senate Commerce Committee had planned to vote on two bills to boost federal climate research—both introduced by committee Chair Jay Rockefeller (D-WV)—but decided to hold off, opting instead to group them with other climate-related matters next month.

  • Greenhouse gas tracking (S 1539): Would enhance federal efforts to track the natural and anthropogenic production of greenhouse gasses, with the goal of providing a scientific foundation for any future emission regulation policies. The bill would direct the National Oceanic and Atmospheric Administration (NOAA), which already collects some data on emissions, to create a national greenhouse gas observation and analysis program. The program would be developed in cooperation with several other agencies, including the National Aeronautics and Space Administration, the National Science Foundation, the Energy and Agriculture departments, and the U.S. Geological Survey. S 1539 would also support the development of new computer models of the global carbon cycle.
  • Black carbon research (S 1538): Would authorize $120 million over six years to create a new black carbon research and monitoring program at NOAA. Black carbon is a potent greenhouse gas but, unlike carbon dioxide, it stays in the atmosphere for only a matter of days. The short-lived nature of black carbon has made it an appealing avenue for limiting warming in the near-term. The NOAA program called for in S 1538 would serve to identify natural and human sources of black carbon, monitor its presence in the atmosphere and on the ground, and model its impact on regional and global climate change and air quality.

Sources: Environment and Energy Daily, Greenwire, ClimateWire, Politico

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